Gap, Inc. (GPS) reported Q4 EPS of ($0.75), $0.28 worse than the analyst estimate of ($0.47). Revenue for the quarter came in at $4.24 billion versus the consensus estimate of $4.36 billion.
- Comparable sales down 5% year-over-year.
Fiscal 2023 Outlook:
“We moved swiftly in fiscal 2022 to manage the levers in our control and took action to drive immediate and long-term improvements in our business during what proved to be a challenging year. While we are better positioned as we enter fiscal 2023, we continue to take a prudent approach to planning and managing our business in light of the continued uncertain consumer and macro environment,” said Katrina O’Connell, Executive Vice President and Chief Financial Officer, Gap Inc (NYSE:GPS). “We are confident that our continued actions to further optimize our operating model and cost structure are key steps toward positioning Gap Inc. back on its path towards sustainable, profitable growth and delivering value for our shareholders over the long term.”
The company’s outlook takes into consideration the continued uncertain consumer and macro environment.
The company is estimating first quarter net sales could decrease in the mid-single digit range compared to last year’s net sales of $3.5 billion. The sale of Gap China to Baozun closed on January 31, 2023. First quarter 2022 net sales included approximately $60 million in sales for Gap China.
The company anticipates that fiscal 2023 net sales could decrease in the low to mid-single digit range compared to last year’s net sales of $15.6 billion. Fiscal 2022 net sales included approximately $300 million in sales for Gap China. Fiscal 2023 will include a 53rd week estimated to positively impact net sales by $150 million.
The company expects first quarter and fiscal 2023 gross margin expansion compared to the prior year. At the estimated level of sales described above, the company is planning SG&A of approximately $1.2 billion in the first quarter and approximately $5.2 billion in fiscal 2023.
The company anticipates fiscal 2023 capital expenditures in the range of $500 million to $550 million reflecting lower technology project investments as well as fewer store openings.